Photo Company Shutterfly Bought Out By Apollo Global In $2.7 Billion Deal

A picture of a wedding album (Photo: Pixabay / sferrario1968 )

Public equity firm Apollo Global Management has agreed to acquire digital imaging company Shutterfly for $2.7 billion. Apollo announced on Monday that it will be buying all of Shutterfly's shares for $51 per piece. Based on Shutterfly's share prices at the end of last month, the deal would value the company at around $1.74 billion.

As part of their acquisition agreement, Apollo will be assuming Shutterfly's outstanding debts, which is currently more than $1 billion. In its statement, Apollo revealed plans to merge Shutterfly's services with its rival Snapfish.

The owners of the California-based photo sharing and photo printing service will become minority shareholders in the newly established company. Details about the new company have not yet been disclosed.

The amount that Apollo is offering is a substantial 30 percent premium on Shutterfly's current share prices, which stood at around $38.91 back in April prior to the acquisition talks.

According to reports citing sources close to the matter, Shutterfly's board of directors had unanimously voted in favor of the acquisition. The deal is expected to be finalized sometime in the fourth quarter of this year.

In a prepared statement to the press, Apollo's Senior Partner David Sambur expressed his excitement on the acquisition. The executive pointed out how Shutterfly is currently the leading pioneer in personalized photo products.

Aside from Apollo, Shutterfly reportedly had a number of suitors that expressed interest in acquiring the company. Shutterfly originally announced back in February that it was seeking a strategic alternative to stay afloat.

The company even sought the help of advisers to counsel it and to review the various offers it had received from potential buyers.

Shutterfly, a company that specializes in creating personalized photo books and gift items, was originally founded in 1999. The company went public in 2006 on NASDAQ. Following the announcement of the deal, Shutterfly's share prices rose by as much as 2.7 percent to $50.25 on Monday.

This was, of course, a minor consolation for the company, whose share prices have fallen by about 48 percent over the past 12 months.

Apollo is working with LionTree Advisors to close the deal. Meanwhile, Citigroup, Barclays, and SunTrust Bank will be providing the funds for the acquisition.

The banks are also serving as additional advisors to Apollo. The company hired Paul, Weiss, Rifkind, Wharton & Garrison as its legal counsel for the transaction. Shutterfly's financial adviser for the transaction is Morgan Stanley, while Fenwick and West stand as its legal adviser.

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